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Residuary Bequests & Estate Planning

Want to give back to a charity you care about after you pass on? Learn how to include a residuary bequest in your Estate Plan.

Patrick Hicks

Patrick Hicks, @PatrickHicks

Head of Legal, Trust & Will

When you take stock of where you are in life, the state of your finances, your vehicles, home, and everything in it, you may know who you would like it all to go to after you're gone. You might have always planned for your daughter to inherit the good china passed down to you from your mother. You may also hope she finds more occasions to use it than both of you ever did. And you may also already know that you want to leave something to your favorite charity. As for everything else? Well, that's a Residuary Bequest.

Confused? Don't worry. You won't be for long. In this guide, we'll explain what a Residuary Bequest is, what you need to know about them, and how to leave a Charitable Residuary Bequest in your Will.

  1. What is a Residuary Bequest?

  2. What to Know About Residuary Bequests

  3. The Residuary Clause

  4. Intestacy Laws

  5. Naming Residuary Beneficiaries

What is a Residuary Bequest?

A Residuary Bequest is a gift of what remains in an Estate after the payment of administrative expenses, creditor claims, and any other types of Bequests listed in the Will—General Bequests, Specific Bequests, and Demonstrative Bequests. For example, many people choose to leave specific assets to their loved ones. Maybe their eldest son will inherit the family home, while everything else will go to their spouse. The "everything else" is the Residuary Bequest, and their spouse is the Residuary Beneficiary.

When managing a Trust-Based Estate Plan, you may fund your Trust using bank accounts, retirement savings, investments, stocks, bonds, and any property you own. As you add Beneficiaries to your Trust, you may wish to give each of your children a set amount of money and create funds for their children's education. When your Beneficiaries have received their inheritance and all other expenses and Probate Court fees are paid, you may make a Residuary Bequest by leaving whatever remains to a specific person or organization.

As part of your Will with Trust & Will or Revocable Living Trust, you will list your property, accounts, and assets as well as where they should go, both during life and after your death. You will also name an Executor of your Estatethe person responsible for paying any applicable taxes and fees from your Estate and carrying out your last wishes. This includes getting your assets to their intended Heirs and managing Residuary Bequests.

If there is no Executor named in the Estate, a Residuary Bequest that you may have wanted to go to your sister could end up going to someone you didn't intend. But more on that a little later.

What to Know About Residuary Bequests

A Residuary Bequest can include property, assets, and lump sums of money. Here's what you should know about Residuary Bequests and naming Residuary Beneficiaries before you finalize that Will.

The Residuary Clause

When you create your Will online with Trust & Will, you will have the opportunity to name the Beneficiary of your Residuary Estate using a Residuary Clause. This clause allows you to bequeath any assets or possessions left in your Residuary Estate to a specific person, group, or organization.

Your Residuary Clause may name your children as the Beneficiaries of your home, while all other possessions will go to your spouse. For example, "I give my two children equal shares of my home and the remainder of my Estate, including any remaining possessions or assets, to my wife."

You may feel strongly about supporting the work the ASPCA does to save, rehabilitate, and adopt out neglected animals and want to help propel that work forward after you're gone. Your Residuary Clause, in this case, would be, "I give my two children equal shares of my home and the remainder of my Estate to my local ASPCA chapter."

You may also wish to specify what a Beneficiary may use your Residuary Bequest for. In those cases, your Residuary Clause may read, "I give my two children equal shares of my home and the remainder of my Estate to my local ASPCA chapter to be used explicitly for the medical care of Pitbulls rescued from dog fights."

If your request is very specific, you should contact your chosen charity or non-profit organization directly. This will ensure that they can use your gift in the way you have specified. The last thing you want to happen when leaving a Charitable Residuary Bequest is to have your generous gift returned because your specific accommodations cannot be made.

Without the Residuary Clause, you would have no other choice but to list every asset and piece of property you own so that you could make Specific Bequests to Beneficiaries. Or, the Probate Court process would distribute your Residuary Bequest as per your state's Intestacy Laws.

Intestacy Laws

As we touched on above, the Executor of an Estate takes on the responsibility of carrying out the last wishes as stated in someone's Will or Trust. But if no Executor is named, if a Will lacks a Residuary Clause, or there is no valid Will at all, your Estate could be left to the whims of the Probate Court.

Every state has Intestacy Laws that dictate what happens to property and assets not left to a specific person in a Will or Trust. Generally, spouses, domestic partners, and blood relatives are the only people who can inherit assets through Intestacy Laws. Unmarried partners, chosen family, friends, and charities receive nothing from Residuary Bequests under Intestacy Laws.

A Will or Trust without a Residuary Clause will trigger the Probate Court to distribute your Estate as per your state's Intestacy Laws. While you may want your sister to have your car if you were to die unexpectedly, if you don't have a Will at the time of your death, or if your Will doesn't include a Residuary Beneficiary, Probate Court may give your car to your son who doesn't want it.

Naming Residuary Beneficiaries

Your Residuary Beneficiary will receive anything that does not go to the Beneficiaries named in your Specific Bequests. If you name more than one Residuary Beneficiary, you can state what percentage each Beneficiary will receive.

Take, for instance, someone who lists a number of Specific Bequests in their Will and then leaves their Residuary Estate to their children. In this case, the person writing the Will, or the Testator, would indicate the percentage each child would receive. The Residuary Estate can be doled out in equal or unequal shares. Two children may each receive 50 percent of the Residuary Estate or, maybe one child will receive 70 percent of the Residuary Estate while the other receives 30 percent.

While you may think you have covered all of your bases with a Residuary Clause, you may also name Alternate Residuary Beneficiaries, just in case. You've worked hard for what you have in life. You should know exactly where it will go when you're gone, rather than allowing Probate Court to decide for you.